Cryptocurrencies - Your Key to Financial Freedom AMA

techlead on 30/03/2021 - 10:45
Last edited 24/05/2021 - 11:22 by 1 other user

I've been tracking the crypto space since Bitcoin was invented and bought my first Bitcoin in 2013 and has been using every cent of my savings to buy cryptocurrencies ever since.

I can now comfortably retire. Which other investment allows you to do that in less than 10 years.

Ask me anything about the cryptocurrency space, there's no such thing as a "silly" question. I think this goes without being said, but I'm going to say it anyway. None of what I say here is financial advice, I do not hold an AFS license, you should seek advice from a licensed professional before making any investment decisions. If you are making investment decisions from some random guy on the internet without doing your own research and due diligence, you should stop immediately!

There's all these controversy about property prices "surging" or becoming unaffordable, not for me, if you invest in the right asset, property is actually getting cheaper and cheaper. Property prices in Bitcoin terms has been decreasing and will continue to as Bitcoin increases in price at a faster pace. So to me, property is progressively getting cheaper and cheaper.

Update:

For those who would like to find out more about cryptocurrencies and why I think Bitcoin is here to stay and will be more valuable in the future, head over to hope.com and watch some of the videos. This site was set up by the CEO of MicroStrategy, Michael Saylor who's company bought an aggregate of approximately 90,531 bitcoins, which were acquired at an aggregate purchase price of approximately $USD2.171 billion and an average purchase price of approximately $USD23,985 per bitcoin, inclusive of fees and expenses as of 24th Feb 2021.

To those who think that I "got lucky" and was "fortunate", that's very far from the truth. I saw this coming, I knew that with rampant money printing by central banks, fiat currency is going to zero and it has been doing so for centuries. All fiat currencies have gone to the zero, in history, there has not been any fiat currency that didn't go to zero. So Bitcoin's rise is inevitable to me, hence I bought it. I didn't go as far as that family who sold everything to buy Bitcoin, but I did use nearly all of my savings to buy cryptos.

Common criticisms of Bitcoin

  • Its just like Tulip mania
    Bitcoin is nothing like Tulips, Bitcoin is a decentalised and censorship resistant network which enables values to be transferred across the internet at very low cost. The value of Bitcoin is the strength of its network and the fact that it has never been breach or hacked, which means unless someone steals your private key, your coins are safe.
    Tulips has none of these qualities. The only thing which Bitcoin and Tulips have in common is the fact they both went up in value very quickly. Even then there are differences, Tulips went up and crashed all within 3 years. Bitcoin has gone through at least 3 cycles where it has smashed its previous all time highs and never dipped below the starting point of the cycle.
    Bitcoin has recorded a higher year on year low every single year since its existence except for 2015.

  • The Bitcoin network uses too much energy
    This is just market supply and demand. People mine Bitcoin because it is profitable to do so. The Bitcoin network do not require so many miners, in fact it started with just one miner. The network can continue with just one miner, it adjusts as more miners enter and leave, this is built into the network. The high energy used by Bitcoin is a sign that it is valuable and people are willing to make the effort in participating in the effort in securing the network and be rewarded for it.
    Due to the profit motive, the energy sources used by Bitcoin miner are increasingly from green energy sources reducing its impact on the environment.

  • It is used for criminal activity
    Fiat currencies are used on a much much larger scale by criminals. Banks launder money for criminal, there's been so many scandals, and those are just the ones which make it to the media, I'm sure a lot goes undetected.
    Bitcoin is actually very bad for criminal activity, this is why they quickly moved onto privacy coins like Monero and Zcash. The Bitcoin blockchain is public and all transactions remain there forever. If a drug deal is done with cash, unless there's a recording device there at the time of the transaction, that drug transaction is untraceable. If you do a drug transaction with Bitcoin, that transaction will always be on the blockchain, all it takes is for law enforcement to tie one address to a real person, and the entire web unravels, so its not very smart using Bitcoin for criminal activity.

My Crypto mistakes and other pitfalls

I want to go over some of the ways I lost money in crypto over the years so maybe you can learn from my mistake

  • Scam websites
    In 2014, there was a website called Bitcoin savings bank, which promises 9%pa interest if I transferred my Bitcoin there. Very similar to what Crypto.com, Blockfi etc offer today, except they are scammers. Unfortunately, I didn't do my research and I believed them. I transferred 2BTC to their "savings account". Never saw it again.
    Nowadays, these sites are very obvious, they promise hourly returns, like 10% every 2 hours. This is impossible to consistently do, they are all scams, don't fall for them.

  • Double your coins scam
    This is quite famous, there are many variants, but essential it just entails you sending your coins and double or some very good return percentage will return. Its a scam, you will get nothing. Fortunately, I have never fallen for these.

  • Pump and dump groups
    These are almost always scams, there are more losers than winners. Yes you may win one time, take it and walk away, but most likely you will lose. I lost more than 1BTC in this. I'm still part of the groups to monitor, but I never participate anymore. Neither should you. They also have these VIP or "inner circle" groups, where they promise you early notification of the coin to pump for a fee. Don't fall for this. They might also have an inner inner circle group or VIP+, where they promise to take your Bitcoin and buy the coins for you, to maximize your returns. These are definitely scams, they will take your Bitcoin and then block you on telegram.

  • Fake wallet apps
    These apps emulate popular wallet apps and asks you for your seed phrases and private keys so they can steal your crypto. Treat your seed phrases and private keys as private. NO ONE should know, not even staff members of the hardware wallet company. Its like your online banking password, no bank employee should ask for that. If any app do, delete it IMMEDIATELY.

  • Leveraged trading
    I lost around 1 BTC (worth around $5-6k USD at the time). I tried to pick the bottom during the 2018 bear market, the Bitcoin price was quite stable and stagnant around the $5500-$6000k mark, so around Nov 2018, I thought that was the bottom and went in with a leverage long. The market went off a cliff dropping down to $3500. I got liquidated, lost the 1 BTC I deposited. I never touched leverage trading again. Its very hard to pick tops and bottoms, so now I just dollar cost average and periodically buy and hold. You don't need to worry about being liquidated if you do this, it will help you sleep better at night haha.

Mod Note: The user is not associated with TechLead YouTube channel.

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Financial Cryptocurrency

Comments

    • techlead on 30/03/2021 - 16:10
      +1

      Yea, sure that. Theta is a pretty obscure altcoin, I wouldn't suggest putting your money in those small cap coins in the hope that it will go up to $1 mil. For every coin that do, there are thousands that doesn't. There are now over 9000 coins, that's abit insane.

      I would suggest putting it in a mix of Bitcoin and Ethereum, then maybe a few of these speculative alt coins.

    • chiron-hero on 31/03/2021 - 20:57

      I put $1k in Harmony Coin - it's now worth $40k and I'm still holding. So yes, I don't doubt for a second there are stories of instant millionaires out there.

  • amos83 on 30/03/2021 - 16:16
    +2

    which exchange do you use? How do you store your Bitcoin? do you leave them on exchanges or withdraw in self custody? any wallet you recommend?

  • GG57 on 30/03/2021 - 16:33

    Together with the rise/fall of bitcoin, my understanding is that there is also a foreign currency exchange risk (i.e. AUD/USD/Bitcoin).

    • techlead on 30/03/2021 - 17:12

      Yes, correct there is a foreign currency exchange risk, the market is quite efficient, it adjusts to that quite quickly.

      If AUD increases in value, the price of Bitcoin in AUD will fall and vice versa for the converse. This is why I was cheering when AUD was weaker before, but its fine, the capital gains on Bitcoin far offsets any FX risk.

      • GG57 on 31/03/2021 - 10:40

        Your 'investment' is USD-based (in terms of its stated value).
        If the AUD/USD moves in a direction opposite to the Coin/USD direction, your coin value is affected.
        Could be a loss; could be a win. But it is another layer of complexity (and risk).

        • techlead on 31/03/2021 - 10:45

          Yes, very true, there's FX risk, but this is more than enough offset by capital gains, so its fine.

  • Farrba on 30/03/2021 - 16:54
    +1

    thanks for responding, is it ok to sign up with several exchanges? or better to stick to one australian based exchange?

    • techlead on 30/03/2021 - 17:10
      +1

      You need to do your research, but usually the big ones are reputable. I go on coinmarketcap or coingecko and find out what exchange the coin I want to get is, then pick the one with the most volume.

      For buying Bitcoin, I stick with the Australian based ones, Coinspot, Independent reserve and BTCmarkets.

      For alts, I use, Binance, Kucoin, HitBTC, FTX, Bitmax.

      Unless there's interest to be had, I instantly withdraw to my hardware wallet.

      • Tony Strong on 03/04/2021 - 16:33

        Do you play Defi? It seems you don't use any dex for defi.

  • Bjingo on 30/03/2021 - 18:06

    What do you think the effect on bitcoin will be once all of them have been mined?

    • techlead on 30/03/2021 - 21:51
      +1

      The way the system is designed, the reward per block will be the transaction fees for the transactions within that block. It will take more than 100 years for all Bitcoin to be mined, none of us here will be able to witness it.

      The idea is that by that time, Bitcoin would be so valuable, that the transaction fees alone will be incentive enough for people to mine it.

  • Trying2SaveABuck on 30/03/2021 - 21:37

    Would you consider moving overseas to avoid paying tax so you can cash out a bit?

    Also congratulations i wish i was in your position and made the call and got rich!

    • techlead on 30/03/2021 - 21:53
      +1

      I considered that. Moving to a jurisdiction where there's no tax on crypto, cash out and then move back to Australia. This would entail me leaving Australia for more than 12 months though, so I'm no longer a tax resident here, I don't want to do that lol. I don't like to live in any of those crypto tax free jurisdictions for any prolonged period of time. Places like Belarus and Malaysia no thanks.

      I did seriously consider Switzerland, but decided against it.

      • Trying2SaveABuck on 30/03/2021 - 23:18
        +1

        I think if i was single Belarus would be a brilliant place to be if i had millions - there women are incredibility beautiful

        Also it is really cheap so you would live like a king

        But i understand you're rich enough to do what you want i guess - fyi im super jelly atm almost all my investments are in the red bar my crypto so i wish i was in your shoes

        • techlead on 31/03/2021 - 07:55
          +3

          Welcome to the crypto bull market. Your crypto is going to swallow up your other investments if you track it via a pie chart. Its a beautiful sight to see. Its going to be like Pac man haha.

          In saying that, you should take profits, there are over 9000 alt coins, most are worthless or overhyped, you should think about selling them for fiat or Bitcoin later this year, around August or September or when they go parabolic. Most of these alt coins will go to $0 during the bear market. Keep that in mind.

          I've had friends who've had multi-million dollar alt coin portfolios during the bull market only to have it go down to virtually zero during the bear market.

          • Trying2SaveABuck on 31/03/2021 - 08:12

            @techlead: Thanks for the tip btw im not the one who downvoted you!

            enjoy the high life!!

          • Trying2SaveABuck on 31/03/2021 - 08:22
            +1

            @techlead: I will say this if i earn enough to pay off my home loan ill probably cash out - it would be nice to be a multi millionaire but i'd settle for not having a massive amount of crippling debt

            • techlead on 31/03/2021 - 08:27
              +1

              @Trying2SaveABuck: Alot of people I know who entered in 2013 did just that. When their Bitcoin portfolios hit an amount which was enough to pay off their mortgage and cover the tax, they cashed out to repay their whole mortgage.

              Unfortunately this was back when Bitcoin was around $7000-8000USD, so they missed out on most of the gains from this bull cycle. They didn't understand Bitcoin, they were in it just for the money because I told them. Jumping on the bandwagon as one would say.

              I knew the potential value of Bitcoin. I read the whitepaper, I highly recommend people to do the same. I knew Bitcoin will eventually hit $10k USD and then $100k USD and keep going up from there. I have $0 in my offset account. Why would you want to sell an asset that is making amazing returns year on year to pay off a loan with such low interest? I don't understand it.

              • Trying2SaveABuck on 31/03/2021 - 09:23

                @techlead: it is hard to understand what its like at the top of the mountain when you have always been at the bottom so you're probably right.

              • taoz on 31/03/2021 - 22:46

                @techlead: interested, what returns are you getting from the value going up?

                • techlead on 31/03/2021 - 22:46

                  @taoz: You mean percentage gain from cost basis? Its an astronomical number. I haven't calculated it.

                  • taoz on 31/03/2021 - 22:48
                    +1

                    @techlead: you mentioned an asset making amazing returns year on year.
                    So im interested what are the returns?
                    If value going up, its not a return until you sell yes?

                    • techlead on 31/03/2021 - 22:49
                      -2

                      @taoz: Well, paper gains are still gains, right?

      • Tony Strong on 03/04/2021 - 16:38

        From what I understand, the day you become a non-tax Australia resident, ATO would take it as an event that you sell all your asset at that day, and a big tax bill is waiting when you go back to Australia and cash out your crypto.

  • negger on 31/03/2021 - 00:58

    You have been in this space for a considerable time. Yet you do not seem to trade any to increase your return or invest more. Why not?

    • techlead on 31/03/2021 - 06:28

      Not sure what you mean by trade any to increase your return? I have converted some into alt coins and those alt coins have increased significantly, such as Dot, Eth, ADA and BNB.

      I have been using the dollar cost average approach, so I have been periodically buying mostly Bitcoin and Ethereum directly with AUD. I don't trade much, not much of a trader, I prefer to hodl.

      • negger on 31/03/2021 - 09:59

        I mean you seem to follow the "older crowds" buy and hold strategy for a new age asset especially considering the sort of unparalleled volatility.

  • mjwills on 31/03/2021 - 07:51
    -1

    I can now comfortably retire. Which other investment allows you to do that in less than 10 years.

    Tulips?

    • techlead on 31/03/2021 - 08:48
      +4

      Haha, nope. Tulip could not have achieved it and tulip mania only lasted 3 years.

      The fundamentals of tulips are nothing like Bitcoin.

      • abb on 01/04/2021 - 12:53

        The fundamentals of tulips are nothing like Bitcoin.

        That's true. Tulips are a physical object that you can touch, and many people find their appearance pleasing.

        (I have a small amount of bitcoin, just in case you lunatics turn out to be right)

  • Tiredman on 31/03/2021 - 09:32
    +5

    Good to hear from another serious hodler. People think Bitcoin is expensive now, no it's not. You will see how much it will be at the next cycle.

    Unfortunately cryptocurrencies are still seen as a taboo by many, especially by the older crowd. Just look at the comments in previous Bitcoin topics. Especially when the price undergoes a correction and all the FUD comes out. Anyway, great topic and hodl.

    • Leeroy Jenkins on 04/04/2021 - 15:35
      +1

      That means it's still "early". if everyone's happy to buy bitcoin, then it'd no longer be as profitable.

  • Staff on 31/03/2021 - 09:42
    +2

    Hey OP,

    Been wanting to get into crypto for a while but not want to jump in with a massive amount. Can I use a few hundred to start off? If yes what apps would you recommend?

    Thanks

    • techlead on 31/03/2021 - 18:25

      You can definitely start with a few hundred. Alot of my friends who went into Bitcoin for the first time now started with $500 to $1000 and they transferred it to Block or Celsius to earn interest.

      Keep in mind that the withdrawal fees from exchanges are usually a flat fee, eg 0.0003 BTC which is around $25AUD. So if you have a low amount, that fee is going to eat into your principle.

      Invest what you can afford to lose, don't overextend yourself. Most of the time people lose in crypto is due to scams, using leverage or just don't have an understanding of how it works (Eg trying to send Bitcoin to an Ethereum address).

      I would recommend exchanges such as Coinspot, Independent Reserve and BTC markets to purchase the Bitcoin or Ethereum or some other major crypto, stick with the majors when you first start out and then use Celsius, Crypto.com or Blockfi to earn interest.

    • Ironic fear on 27/04/2021 - 23:16
      +1

      Binance is easy and you can load funds for no fee direct with osko which most banks support.

      Also has a good range of alt coins if you're that way inclined.

  • Blue Cat on 31/03/2021 - 11:18
    +1

    Why do you think world governments would accept currency that they have no control over?

    I think bitcoin will always stay “underground” and will always have to be converted to fiat to be of any use, which means that savings would be fluctuating everyday. Also, when some old fart in the government decides that holding/withdrawing is illegal, your savings are RIP.

    Any reasons to believe that governments will one say accept bitcoin with open arms?

    • techlead on 31/03/2021 - 11:30

      There's a lot to unpack there, let's do it in parts.

      • Why do you think world governments would accept currency that they have no control over?
        They don't need to accept Bitcoin as "currency" they have no control over. The beauty of a decentralized and censorship resistant network is that there's nothing the government can do against Bitcoin. They can ban it, then what? How can they enforce it?

      • I think bitcoin will always stay “underground” and will always have to be converted to fiat to be of any use, which means that savings would be fluctuating everyday.
        Savings fluctuating every day is not a bad thing. If you have an investment property, that fluctuates every day too, you just don't know about it. If you have shares, that definitely fluctuates every day.

      • Also, when some old fart in the government decides that holding/withdrawing is illegal, your savings are RIP.
        This has already happened before, read up on Executive order 6102, "forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.". If a similar order was given for Bitcoin, it wouldn't affect it much due to its decentralised and censorship resistant network. No government or court can confiscate my Bitcoins.

      • Any reasons to believe that governments will one say accept bitcoin with open arms?
        Government doesn't need to accept Bitcoin. Bitcoin is thriving already. Bitcoin wouldn't exist if it had to as the government for permission. Uber and Airbnb wouldn't exist either.

      • negger on 31/03/2021 - 12:55

        I think India proposed a ban but I haven't looked up the details or how they intent to implement it. Others may follow?

        I realise that Crypto is banned in China but that's where most of the mining takes place.

        • Tiredman on 31/03/2021 - 14:24
          +1

          India? Not the first time. Not the last time. Politicians there talk a lot but when it comes to actually doing it, that's another thing. They won't be missed regardless.

        • Leeroy Jenkins on 04/04/2021 - 15:39

          At this rate, whoever bans Bitcoin is simply blocking themselves out of the game. The only incentive for banning bitcoin and other open blockchain currencies is for their government controlled digital currency to get full adoption.

          China had to ban BTC so that nothing stands in the way of their national digital currency.

  • Poor Ass on 31/03/2021 - 11:25

    Hi OP,

    When you take out a loan with Celsius, how do you use those funds for everyday expenses or do you just put in Tether and earn interest?

    What exchange do you use / plan to use to cash out to AUD to your bank account?

    Do you have a visa card of some sort that can pay for living expenses directly funded Bitcoin like crypto.com? Any recommendations?

    Also do you get letters from ATO every year requesting crypto sales to be declared regardless of activity?

    Thanks

    • techlead on 31/03/2021 - 11:45

      I haven't taken out a loan with Celsius yet. I'm thinking about it. I want to do that to purchase a bigger property to live in.

      My salary more than covers everyday expenses, what's left I've been using to buy more Bitcoin, Eth and ADA.

      I recommend Coinspot, Independent Reserve and BTCmarkets to cash out AUD to your bank account. You can also do this on Binance, they've got an Australian entity now, I haven't use them to do that before.

      I used to use the Crypto.com metal Visa card to pay for everything, however they've tightened the cashback terms. Now most of the big ticket items, like council fees, car rego, insurance etc do not have a cashback, only discretionary spend, like eating out have a cash back, not even fuel has it anymore, so I have stopped using them.

      Yes, the ATO sends out notifications to everyone who is detected to have held crypto, most likely reported by those Australian exchanges, Coinspot, Independent reserve, BTCmarkets etc. I know they have different kinds of letters they send out. If they've detected a sale, they would send another type out to those people, but there's a general letter that goes out to all crypto holders.

      • Poor Ass on 31/03/2021 - 13:17

        are you hyped about Celsius adding ADA?

        do you invest stocks or ETFs? or are you pure crypto go for broke?

        how does the crypto.com card work if you are not interested in cash back. does it just convert the BTC to AUD rate at the time and pay for your expenses when you tap? Is the card worth getting? or wait for Binance visa card?

        you hear about if purchased under $10k and use as personal use for payments possibly can be exempt from CGT?

        Do you have a paper wallet too for a source of protection?

      • turbochris on 31/03/2021 - 13:22

        What about CGT when you use the crypto.com Visa card to purchase goods and services. Do you calculate CGT on every purchase and relate it back to the crypto purchase cost basis?

        • Poor Ass on 31/03/2021 - 13:23

          obviously he bought it under $10k and exempt as he uses it as a source of payment hahaha

        • techlead on 31/03/2021 - 18:26
          +1

          I fund the Crypto.com Visa card with my debit card using fiat currency. So no CGT considerations for me. If you sell your crypto into it, Crypto.com takes a spreads, I don't want to give them those profits.

      • drfuzzy on 31/03/2021 - 16:32

        Don't use Coinspot - the fees are too high.
        Binance Australia is good and low fees.

      • Tony Strong on 03/04/2021 - 16:43

        Try binance to cash out, it goes to your bank account in a sec, sometimes even faster before I close binance and open my netbank app. Also binance can handle big amount.

  • ihbh on 31/03/2021 - 11:26
    +2

    using every cent of my savings to buy cryptocurrencies ever since

    Pro-tip: sophisticated investors diversify their portfolios. Sometimes if you put it all on black, etc., you might get lucky, but when you retire, you want a reasonably reliable source of income at least every now and then, and then you don't want to find your luck changing.

    Cryptocurrencies - Your Key to Financial Freedom AMA

    More appropriate title is: Cryptocurrencies - Key to My Fortunate Financial Freedom AMA

    • techlead on 31/03/2021 - 11:31
      +5

      "Diversification is a protection against ignorance" - Warren Buffett

      Would you consider those who made money in property as being "fortunate", as in just a fluke with no skill? I looked at the macro economic environment and believed that Bitcoin will be huge in 2013.

      • ihbh on 31/03/2021 - 11:49

        "Diversification is a protection against ignorance" - Warren Buffett

        You clearly don't have a clue about what he's talking about here do you? He holds a concentrated portfolio; he's saying if, for example, you hold thousands of different stocks, then that "diversification" is a protection against ignorance.

        Check for yourself if BRK holds just one a particular stock or even one asset class.

        What is your understanding of "macro economic environment"?

        • techlead on 31/03/2021 - 12:02
          +5

          Cash is trash. All fiat currencies goes to zero. Ever since coming off the gold standard, the USD has lost more than 90% of its purchasing power. The GBP has lost more than 99%.

          Therefore, there needs to be an asset to hedge against this, as a store of value. Commodities like gold used to serve this purpose, however owning physical gold is troublesome and costly. Paper gold is rife with fraud, how do you know your claim on this physical isn't also claimed by another party? This is precisely why Nixon "temporarily" suspended the USD's convertibility to gold because other countries demanded gold instead of USD because they suspected it wasn't fully back and they were running on fractional reserves.

          Bitcoin solves this problem. It is finite and easily verifiable via the open source code. Its a decentralized and censorship resistant network which has never been hacked since its existence. I knew that one day it would be digital gold. I knew that companies will buy it as their reserve asset, in fact I was pleasantly surprised that it has happened this quickly, I thought it wouldn't happen until the next cycle in 2024, but Elon Musk and Michael Saylor lead the charge.

          Right now, central governments are printing like crazy, so Bitcoin is not so much going up, but more like fiat currency are going down relative to it. Because there is no floor to how low fiat currency will go, there is no ceiling to how high Bitcoin will be in dollar terms. I knew this would happen when I invested in Bitcoin, I didn't know the exact price and timing, but I knew this general trend that is playing out will happen. This is why I buy it, and continue to buy it.

          Its not a fluke and I wasn't "fortunate". Lottery winners are "fortunate", not me.

          • idjces on 02/04/2021 - 20:45

            @techlead: In that regard, bitcoin relies on the greater concensus choosing it as the store of value.

            Are you not worried the general consensus changes, and they choose another medium?

            Eg, the consensus finds a better alternative, perhaps without drawbacks like energy consumption

            • techlead on 02/04/2021 - 21:46
              +1

              @idjces: Yes, the market may decide on another winner and have more faith in that, thereby pumping it up more. That's definitely a risk. Hopefully, I can see that coming and adjust accordingly. This sort of changes don't occur overnight.

              Anyone can create a Proof of Stake (PoS) coin right now and claim its better than Bitcoin, the issue is, the market will not trust it as much as Bitcoin. If that changes, this coin may beat Bitcoin.

              This like saying to a Nokia shareholder, are you worried that a better phone company will come along and take over as the market leader?

      • GG57 on 31/03/2021 - 11:52

        "…those who made money in property…"
        I assume you mean those that have/had investment properties; in which case, what 'skill' did they have that resulted in the property market increasing in value for the specific area/property type where they purchased into? Surely it is more luck, or a hope, that the property market would increase in value, as those investors cannot influence that market.
        Some would say that the crypto market is full of people trying to influence the market.

        • techlead on 31/03/2021 - 12:04
          +2

          There's "manipulation" in every market. Have you seen these fund managers who short a stock, then start dissing it on TV?

          This is a case for more regulation, so governments should come to the table to regulate this to reduce the "manipulation". It doesn't mean the underlying asset is bad. Look at Bill Ackman and Herbal life, he shorted it and started dissing it on TV constantly.

          • GG57 on 31/03/2021 - 13:03

            @techlead: I'm not disagreeing with your comments, but you haven't mentioned or referenced the property market.

    • turbochris on 31/03/2021 - 13:25
      +2

      Most Australians are not diversified and are heavily leveraged into property.

  • JavierB on 31/03/2021 - 12:18

    @techlead Thanks for sharing your experience and knowledge OP it’s greatly appreciated!

    I have a portfolio heavily weighted towards BTC and XRP and I believe XRP has the potential to sky rocket once the SEC rangles are behind it, would love to know your thoughts

    • turbochris on 31/03/2021 - 13:33
      +1

      Not OP, but I reckon that XRP is a shitcoin:

      1. Its not decentralized so that eliminates a lot of the benefits of decentralised crypto
      2. Its designed to be used by the traditional finance/banking industry which if you are bullish crypto is going to wane.
      3. The coin is 100% premined and the supply is massive and centrally controlled unlike BTC where supply is fixed and algorithmically controlled.
      4. The founders have huge bags which will inevitably mean pressure on price.
      5. There is no longer any compelling USP that other decentralised products don't have.

      Having said that I have traded it and make a bit of profit but no longer hold.

    • techlead on 31/03/2021 - 13:45

      I know XRP has a very strong following, however I personally don't think the token will go anywhere. Ripple the company might do well, but they aren't selling any shares of the company.

      The majority of XRP are still being held with Ripple, I don't see much upside to the token. Of course, that doesn't mean it wouldn't spike up, look at Doge, I personally don't hold any. It is very cheap, so I have used it as a way to transfer value around, but I don't hodl any.

      • Leeroy Jenkins on 04/04/2021 - 15:46

        so I have used it as a way to transfer value around, but I don't hodl any.

        hahah yeah XRP transfer is basically instant, same as TRX. I don't hold any of these atm though.

  • MrKnowItAll on 31/03/2021 - 13:00

    My own story with crpyto: I jumped in back in 2019 when there was a huge bull run and lost quite a lot (to me anyway). Spent the last two years regretting it before deciding 1 month ago that I should try using what little funds were left from that ($400AUD), throwing in another ~$300AUD, and then trading coins which I believe have good meaning behind them. I typically stay away from 'shitcoins' because they just pump and dump constantly.. don't get me wrong, you can make a tidy profit on them, but it's very easy to lose money on them too.

    I now pick coins which have a good project / meaning behind them. I don't know if I can mention specifics, but there's a few that rival popular streaming services like spotify and youtube. Then there's some that are to do with gambling or making trading easier - all things that have a place in today's society.
    My biggest missed opportunity was buying into a music streaming service at $0.36/coin and selling at $0.50.. it mooned to $5.00 2 weeks later and I missed out on $5,000USD profit :( my takeaway from this is to exhibit patience and accept that coins will drop and rise naturally, do not panic!
    My biggest success so far is $280USD profit on a $77USD investment over the course of two days and the rest have also been adding up.
    I've now made up my loss from 2019 and am back in the green.

    I was initially using coinspot which was entirely web based without proper charts or anything, essentially I was flying blind. I can't stress enough how important it is to learn to read charts on other platforms (Binance, BigOne, etc.) so you can get a really good understanding of how the market is performing and where it's likely heading, things like support and resistance zones or how simply drawing a line on a chart can show where it's likely to drop / rise to ankd what is needed for it to break out and shoot for the starts were a mysetery to me a month ago, but now it helps with making smart investment decisions. Whilst I haven't made a life changing amount yet, the road to success is a long one and cannot be rushed.

    • techlead on 31/03/2021 - 13:47

      Thanks for sharing your story.

      I'm curious in how you "lost quite a lot"? Did use leverage or did you just sell at the bottom?

      • MrKnowItAll on 31/03/2021 - 14:26
        +1

        I bought a large amount of XRP at quite a high level ($3.62 - i'll never forget that number) and although it did continue to rise thereafter, I was expecting a slight dip and then for it to rise higher, turns out it never did. Seemingly overnight when it dipped well below where I bought in so I decided to just hold until it reached that point again. After 2 years it was showing no sign of rising, so I just sold it all and tried again with other coins. Best decision I've made so far.

        • Trops on 01/04/2021 - 23:26
          +1

          Wow. I was in similar situation to you. Heavily leveraged on XRP at its height. Bought at $2-$3 then but has never recovered since. Just sold all of it this yr!

    • Leeroy Jenkins on 04/04/2021 - 15:50
      +1

      Whatever trading platform you use, I suggest checking out tradingview.com. This is IMO the best charting tool in existence, it's got all stock market/crypto/commodity charts available.

      I daily check crypto and ASX stocks with this. I don't need a membership, the free account just works with quad EMA indicators, but I'm paying a yearly membership to show them my appreciation.

    • MrKnowItAll on 05/11/2021 - 17:11
      +2

      As a followup to this, around two weeks after posting the above I invested $1k USD into an altcoin on pancake swap and although my $1k turned into just $100 for a few months which was pretty creap, in the last month it's taken right off to just under $90k.. it had a drop this morning which saw it now down to $55k, but the team behind it are highly motivated and innovative in what they do with their token so I have every reason to believe it will continue to climb much higher than it is, found this one purely by chance without knowing too much about the team (though they seemed like decent hard working people) and it paid off.

      I've since taken some profits and invested into gaming coins as well, mostly NFT and play to win based tokens which have a clear and realistic roadmap with a fully doxxed team who have a good background, will see if this comes to fruition over the years but it certainly pays to do research into what you're investing in and make sure the team are legit, especially when you're buying coins that aren't on an exchange.. for instance we found that squid game coin early on but the names of the team were a little off, with one persons surname being anothers first name, it felt wrong and turned out to be a scam, lucky they weren't the brightest scammers.

  • [Deactivated] on 31/03/2021 - 13:06
    +6

    soz, your on the wrong forum. bullshit is strictly only allowed on whirlpool

  • timmy_tam on 31/03/2021 - 13:17
    +1

    Thanks for this OP, appreciate a deeper exploration into Cyprto

    my story, i watched ripple XRP start off at .27c. BTC market fudged my application and by the time i was set up, it had jumped to $4.
    then i bought, and it tanked and is now hovering around 40-70c

    it was only $500, but it pretty much put me off crypto.

    my question is,

    1. what do you think of Ripple?
    2. even with all the backing of the banks to go XRP, its still failing to perform. thoughts?

    TIA!

    • techlead on 31/03/2021 - 13:51
      +6

      My view on XRP is that its not a true crypto. It is centralized and completely pre-mined. The value is all in the company, Ripple, but they aren't selling any shares of that. I would buy shares in Ripple, not XRP.

      I've always said XRP doesn't belong in the top 3, I don't think it belongs in the top 50 even.

      Don't let your experience with XRP turn you off crypto. Bitcoin should be the bedrock of your portfolio.

      • Trops on 01/04/2021 - 23:28

        I sold my xrp this yr and use whatever i got to short it on binance!

  • drfuzzy on 31/03/2021 - 13:23
    +1

    Hi @techlead , can you turn your messages on or message me?

    I set up a similar crypto strategy several years ago in particular with SMSF and yield ideas. It would be good to compare notes as it is somewhat challenging in Australia with a limited number of people doing this.

    • techlead on 31/03/2021 - 13:48

      Done

      • drfuzzy on 31/03/2021 - 16:35

        Thanks, have private messaged you.

  • bigbluefish on 31/03/2021 - 13:44

    How bullish are you on LINK?

    • techlead on 31/03/2021 - 13:49

      Link has pumped a lot already. I hold it because I want to be exposed to the Oracle section of crypto. I will most likely sell that into Bitcoin towards the end of the bull market. I'm selling nearly all of my alts, I don't want to hold alts during the bear market.

      • [Deactivated] on 31/03/2021 - 17:09

        Do you see a bear market soon?

        • Leeroy Jenkins on 04/04/2021 - 15:52

          No one can predict when the bear market comes, but yes, there will be one if things go parabolic.

          The cycles will prob end once BTC gets truly mass adopted. Again, no one can tell you when that will happen.

          • [Deactivated] on 04/04/2021 - 21:44

            @Leeroy Jenkins: Ta.

            Not sure why, but my gut feeling says September onwards for a couple of months.

  • kev98 on 31/03/2021 - 13:58

    What wallet do you recommend? Trezor? Ledger?

    Also, seeing as it is an AMA - what is current value of your portfolio? And how many bitcoins do you have

    • techlead on 31/03/2021 - 18:27
      +6

      Either one is good, make sure you get a sealed one which hasn't been tampered with.

      My portfolio value is now more than $45 mil USD and Bitcoin is 35%. I expect that to go down as the alt coins run up due to alt season.

      • gr8mind on 01/04/2021 - 20:16
        +5

        You are worth $45mil US
        You don’t want to retire
        You are worried about some CGT
        You want it to crash so you can get some more
        And you’re hanging out on Ozbargain?

        That’ll do me.

  • Mistredo on 31/03/2021 - 14:06
    +2

    If crypto continues to grow, sooner or later, governments will fear they are losing sovereignty over their currency, and they might start imposing extreme taxes and regulations on it. Don't you think?

    I understand a single government cannot destroy crypto due to its decentralized nature. Nevertheless, it is enough for our government to restrict it to make your life miserable. You might be able to move to another country, but this option is not available for everyone, and if it affects too many people in a few rich countries, it will result in a massive drop in value.

    What's your take on it?

    • techlead on 31/03/2021 - 14:39
      +2

      I do take your point that governments will want to regulate this space more. In terms of "losing sovereignty over their currency", this is more of an issue for stable coins than Bitcoin or Ethereum.

      What China does with stable coins is a good litmus test as people are using USDT and other stable coins to circumvent capital controls. They haven't done anything draconian yet.

      Governments can certainly try to restrictions on Bitcoin, but enforcement would be tricky due to the decentralized nature of the network. India is very close to this, if they criminalize holding Bitcoin, let's see how they enforce it. Its not something they can easily detect and prove. How can the government prove I have Bitcoin if I don't use any centralized infrastructure, like an exchange with KYC?

      The value of Bitcoin may decrease if governments due try to restrict it, but I think it would be temporary.

      • Mistredo on 31/03/2021 - 14:55
        +2

        Thanks for your reply.

        I would say it is pretty easy to prove it. How will you buy goods and services with your crypto? The moment you exchange it for something, you will be exposed, and the government will know about you.

        Nevertheless, it seems you are not considering this as a risk for now. :-)

        • techlead on 04/04/2021 - 07:49

          That's why I don't use Bitcoin to exchange good and services. Its a reserve asset.

          I guess when I transact with people, they can trace it. Maybe if they criminalize Bitcoin, it would be traded like a bag of weed or something, at a darkened street corner where some money and USB changes hands.

          Governments criminalizing Bitcoin and other cryptos is a risk, but very very very unlikely to happen, especially if Western government upholds their belief in freedom. Bitcoin is just an asset, how people use it is on them. Look at Silk road (the huge online market place where people buy drugs with Bitcoin). The solution to Silk road is to take it down, its not to ban Bitcoin. Let's say they were successful in banning Bitcoin, they will just use another medium of exchange. The drug trade did not spring up with the invention of Bitcoin, it will not be prevented by banning it.

      • kanad on 04/04/2021 - 07:40

        “… let's see how they enforce it. Its not something they can easily detect and prove.”

        https://www.theguardian.com/australia-news/2020/dec/03/dark-…

        • techlead on 04/04/2021 - 07:47

          So there are 3 new types of warrants, none of which I think pose a serious threat to crypto.

          The threshold for 2 of these warrants are for serious crimes, I'm not committing a serious crime and I doubt even if they criminalize the holding and transacting of Bitcoin, they'd consider that a "serious crime". If that happens, I think we've gone down a very draconian rabbit hole. No one should stand for this, because they will go after other freedoms next.

          • Data disruption warrants enable the AFP and the ACIC to disrupt data by modifying, adding, copying or deleting in order to frustrate the commission of serious offences online
            This has no effect on Bitcoin and cryptos

          • Network activity warrants allow agencies to collect intelligence on serious criminal activity being conducted by criminal networks; and
            Doesn't affect Bitcoin much.

          • Account takeover warrants let the AFP and the ACIC take control of a person’s online account and can be combined with other warrants to gather evidence to further a criminal investigation
            So applies the most to Bitcoin. So they can take over your account in Australian based exchanges. That's why you shouldn't leave vast amounts of Bitcoin on exchange accounts.
            They can't take over an hardware wallet account.

  • michaelTito on 31/03/2021 - 14:08
    +2

    I love good happy story like this. Keep It up and all the best.

  • trapper on 31/03/2021 - 14:12
    +10

    I have some bitcoin so I'm not totally against the idea of making some free cash here, but lets not pretend there is no risk of losing it all.

    Especially risky if you are borrowing against it, you could end up less than broke.

    I mean you could just sell off some of your coin and be a guaranteed multi-millionaire for life, yet are still 'all in' for some unknown reason. It's not logical.

    There are lots of risks.
    You somehow lose access to your wallet. - you got hacked, got robbed, house burned down, had some kind of accident resulting in brain injury, etc
    Bitcoin itself gets hacked or exploited.
    Government action could make bitcoin illegal. - almost seems inevitable due to the astronomical amount of energy wasted in mining, especially when you think in the longer term.

    • johnno07 on 31/03/2021 - 14:57
      +4

      It seems crazy to me. Why not cash out enough to last you a lifetime, swallow the bitter pill that is CGT, then leave the rest in for that multi-generational wealth OP seems to be chasing?

    • techlead on 31/03/2021 - 15:55
      +2

      No one is saying you can't lose it all.

      How do you end up less than broke? Do you understand how the loan works?

      Let's say I take out a 25% LVR loan on 10BTC. Assuming BTC is at $75k AUD. I sent them my 10BTC to hold as collateral and they give me $187,500. Let's say Bitcoin went to zero. They take my 10BTC, I keep the $187,500 sent to me. That's all. I lose my Bitcoin as collateral, but I get to keep the funds I received from the loan.

      How is this less than broke?

      • You somehow lose access to your wallet. - you got hacked, got robbed, house burned down, had some kind of accident resulting in brain injury, etc
        This risk is not restricted to Bitcoin. Isn't there another thread where this guy lost $100k because his email got hacked and he thought he was sending the move to his property broker for stamp duty? You raising this point shows you have no idea how crypto works. There are way to account for this risk. For example, you can restore your hardware wallet with 24 to 48 seed phrases. It doesn't matter if they take your device or your house burns down, as long as you have these words, you get access to the cryptos again. So all you have to do, is split these words up, keep them in different places and you are covered.

      • Bitcoin itself gets hacked or exploited.
        This is the biggest risk. If the Bitcoin's network itself is hacked, it will go to zero. It has yet to be hacked in the 10 years of its existence.

      • Government action could make bitcoin illegal. - almost seems inevitable due to the astronomical amount of energy wasted in mining, especially when you think in the longer term.
        Unlikely, but if they tried, it would be very difficult for them to enforce. Banning holding Bitcoin is very different to banning mining. Banning mining by certain countries is fine, it will just shift to another. Bitcoin can be supported by just one computer mining, it doesn't need all the current miners. The network is built to adjust for that.

      • kingsville on 31/03/2021 - 16:17

        Or, rather than cash it all out, diversify across physical and digital assets!

        • techlead on 31/03/2021 - 18:01
          +2

          When you know that an asset will get excellent returns, why do you want to dilute that with diversification?

          • Mistredo on 31/03/2021 - 20:54
            +4

            @techlead: You don't know that, and a black swan event could wipe out your entire portfolio.

      • trapper on 31/03/2021 - 17:24
        +4

        You somehow lose access to your wallet. - you got hacked, got robbed, house burned down, had some kind of accident resulting in brain injury, etc

        This risk is not restricted to Bitcoin. Isn't there another thread where this guy lost $100k because his email got hacked and he thought he was sending the move to his property broker for stamp duty? You raising this point shows you have no idea how crypto works.

        Mate you must be joking. Bitcoin is far riskier than your bank account. If you transfer your bitcoin into the wrong wallet it isn't even possible at all to get it back.

        • techlead on 31/03/2021 - 18:04

          How's it working out for those who put all their savings in a bank account?

          Have you read that story about that couple who saved up $135k over 8 years and found that they can't afford any properties.

          Over the last decade or more, the biggest losers are those who diligently save and put it in their bank account.

      • trapper on 31/03/2021 - 17:29

        Government action could make bitcoin illegal. - almost seems inevitable due to the astronomical amount of energy wasted in mining, especially when you think in the longer term.

        Unlikely, but if they tried, it would be very difficult for them to enforce.

        We may see in India soon. https://www.reuters.com/article/uk-india-cryptocurrency-ban-…

        The bill, one of the world’s strictest policies against cryptocurrencies, would criminalise possession, issuance, mining, trading and transferring crypto-assets, said the official, who has direct knowledge of the plan.

        A government panel in 2019 recommended jail of up to 10 years on people who mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies.

        :/

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